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A standing order (or a standing instruction) is an instruction a bank account holder ("the payer") gives to their bank to pay a set amount at regular intervals to another's ("the payee's") account. The instruction is sometimes known as a banker's order. They are typically used to pay rent, mortgage or any other fixed regular payments.
In order to improve the responsiveness of international banking, a method of cover payments was developed. All cover payments involve two messages, the MT103 and the MT202 COV. MT103 is the direct payment order to the beneficiary's bank that results in the beneficiary's account being credited a specific funding amount.
It enables automated payment processing and can be used for both national and international payments across Europe. With the introduction of the SEPA payment area the IPI receipt is regarded as largely obsolete. In Switzerland and the Principality of Liechtenstein the IPI payment slip is still used for the execution of manual SEPA payments. [2]
A MT304 message is considered an "Advice/Instruction of a Third Party Deal" and it used to advise of or instruct the settlement of a third party foreign exchange deal. [3] For example, an asset manager who executed a FX transaction with a broker would send a MT304 instruction to the custodian bank of the client. Example 2. MT103
A funds transfer can generally be described as a series of payment instruction messages, beginning with the originator's (sending customer's) instructions, and including a series of further instructions between the participating institutions, with the purpose of making payment to the beneficiary (receiving customer). [1] Funds Transfer example
A crossed cheque – the oblique or vertical lines in the centre form the crossing.Like most modern cheques in the UK, the cheque is pre-crossed as printed by the Bank. A crossed cheque is a cheque that has been marked specifying an instruction on the way it is to be redeemed.
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The sending bank transmits a message, via a secure system (such as SWIFT or Fedwire), to the receiving bank, requesting that it effect payment according to the instructions given. The message also includes settlement instructions. The actual transfer is not instantaneous: funds may take several hours or even days to move from the sender's ...